The Long Tail is an uber profitable business strategy

What I want is not what everyone else wants when they want it.  But, somebody somewhere wants to sell it to me so they can profit from The Long Tail.

This is a business strategy that enables entrepreneurs to provide products that serve niche markets.  It was described by Chris Anderson in Wired Magazine.  Standard brick & mortar stores (Wal-mart, Nordstrom, Best Buy, CVS, etc…) spend millions of dollars trying to gain the attention of consumers.  Of course they are effective, however, only as effective as the amount of inventory they can maintain.  Standard economic principles of supply & demand and opportunity costs, limit what traditional stores can carry.  Therefore, they focus on only profitable items.  (Wondering: Where does all the old picked over stuff go???)  The Long Tail of internet commerce allows companies, particularly digital ones, to provide an essentially endless supply of downloadable items and services to a worldwide consumer base.  All done without the significant overhead of a standard store (employees, utilities, construction, etc…) iTunes is almost the perfect example of the Long Tail.

Click here for an interesting and witty view of the Long Tail and dating from one of my classmates.

The Long Tail is graphically depicted here:

The Long Tail

Here is a verbal description from Wired Magazine:

What’s really amazing about the Long Tail is the sheer size of it. Combine enough nonhits on the Long Tail and you’ve got a market bigger than the hits. Take books: The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon’s book sales come from outside its top 130,000 titles. Consider the implication: If the Amazon statistics are any guide, the market for books that are not even sold in the average bookstore is larger than the market for those that are (see “Anatomy of the Long Tail“). In other words, the potential book market may be twice as big as it appears to be, if only we can get over the economics of scarcity. Venture capitalist and former music industry consultant Kevin Laws puts it this way: “The biggest money is in the smallest sales.”

P.S.  Does anyone know how to make the U with two dots over it.  (German style…uber)???

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One Response to The Long Tail is an uber profitable business strategy

  1. Meg says:

    ü

    I’m testing the umlaut (the two little dots above the “U”) to see if it works on WordPress. If it works, here’s what I did: went to the character palette on my hard drive (I have a Mac…don’t know where they exist on PCs) and looked for the umlaut for the letter u, then hit insert. If it doesn’t work, well, sorry for the post and consider this a thank-you for visiting my blog. I’m adding you to the blog roll, Majorman.

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